Gold Declines Second Time in Three Sessions Ahead of Fed Meeting

By Debarati Roy and Nicholas Larkin -
Jul 30, 2013

Gold futures declined for the second
time in three sessions as investors awaited the start of the
Federal Reserve’s two day policy meeting.

Gold has risen 8.3 percent in July, set for the biggest
monthly gain since January 2012. Fed Chairman Ben S. Bernanke
said this month that it’s too early to decide whether to begin
scaling back debt purchases in September, after saying on June
19 that bond buying could slow if the economy improves. Home
prices in the U.S. rose in May by the most in more than seven
years, a report showed today in New York.

“We are seeing some nervousness in the market before we
hear from the Fed tomorrow,” Phil Streible, a senior commodity
broker at R.J. O’Brien & Associates in Chicago, said in a
telephone interview. “Strong housing data got people more
worried about tapering.”

Gold futures for December delivery fell 0.4 percent to
settle at $1,324.80 an ounce at 1:44 p.m. on the Comex in New
York. Prices tumbled 21 percent this year after some investors
lost faith in the metal as a store of value and on speculation
the Fed may curb its bond-buying program.

The slump this year hurt investors from billionaire John
Paulson to producers already contending with rising costs.
African Barrick Gold Plc (ABG), a producer of gold in Tanzania, said
today it wrote down the value of its mines by $727 million and
will reduce costs.

Silver futures for September delivery dropped 0.9 percent
to $19.68 an ounce in New York.

Trading was 42 percent lower than average for the past 100
days for this time of day, according to data compiled by
Bloomberg.

On the New York Mercantile Exchange, platinum futures for
October delivery slipped 0.4 percent to $1,437.50 an ounce, the
third drop in four sessions.

Palladium futures for September delivery declined 2.1
percent to $728.65 an ounce.